I’m writing this blog post to discuss the positives of buying a home compared to renting. Everyone’s situation is different so you need to make the decision based on your preference and situation.  

1. Buying a home automatically signs you up for a savings plan. 

Each month when you pay your mortgage payment you might not know it but your one step closer to owning your own home. Your mortgage payment breaks up into two categories (principal or interest). During the first few years of your home loan most of your money will go to interest and a small portion of your payment will go toward the principal. To know more about where you money goes when you pay your mortgage watch this short video on amortization schedules.    



When you decide to sell your home you will have equity (savings plan) built up in your home. You will receive the difference of the sales prices – debt = equity.  Once you decide to stop renting or move you don’t receive anything except your security deposit. 

2. Uncle Sam gives you tax write offs once you own a home. 

Owning a home is expensive but the federal government allows you to write off some of the expenses which include: paid interest, energy efficient improvements, points paid for the loan, and real estate taxes. To learn more about home owner tax write offs watch this short video or speak with a CPA.  



3. If you own your home your the boss!

When you rent a home and sign a lease this lease establishes rules for the tenant to follow such as (being able to alter paint color, pets, number of people allowed to live in the home, and etc). Obviously you have to follow state and federal laws while enjoying your home but you get to decide everything else. 

4. Your monthly mortgage might be cheaper than your rent. 

Obviously this depends on where you live and why type of home you want. But in the Ashland, Russell, Huntington, and Barboursville area I have spoken to many renters who are paying $1,000 to 1,500 a month in rent. Here is example: if you got a 30 year loan for $200,000 at an interest rate of 4.5 your monthly mortgage payment would only be $1,013.37 a month (this doesn’t include home insurance or property taxes). If your curious about how loan payments are figured go to this website to see how a mortgage calculator works. 


5. Home values can appreciate (free money) over long term.

Over time your home value can appreciate or depreciate over time. Hopefully your homes value will appreciate over time and your home will be worth more money than what you bought it for.  When I first started in real estate I sold a home near $130,000 and the seller told me they bought it for $65,000 twenty five years ago. Now you might be saying the homes value doubled but it took a lifetime to increase. Although appreciation takes time it is a positive thing. The biggest killer to a home appreciation in my opinion is the neighborhood. Your neighbors junkyard in the front yard will cause your home to lose value faster than you can make the payment. Always buy in a nice neighborhood that is established.    

6. Buying a home is an investment

Buying a home is one of the biggest financial investments a consumer will be involved with in their life. But owning a home allows you to use the equity any way you choose. Example: If you bought an unpriced home for $80,000 (appraised value for $95,000) you have $15,000 worth of equity the first day you own the home. After making payments for a few years and making reasonable updates you might have $30,000 worth of equity. You could get a home equity line of credit on your home and use a portion of that equity for anything (more updates, pay off credit cards, or invest). 


If you would like to learn more about home equity line of credit watch this short video. https://www.youtube.com/watch?v=KquS98k1sjc


7. The choice is yours but